European markets have taken fright after another slide in Asia on Tuesday, as the price of oil fell back under $30 a barrel.
The FTSE 100 in London fell 1.1% to 5,810 points in morning trading, with similar falls in Frankfurt and Paris.
Shanghai tumbled 6.4% to its lowest close since December 2014, while the Hang Seng in Hong Kong fell 2.4%.
Brent crude slid 3.7% to $29.38 a barrel, while US oil was 3.1% lower at $29.40.
Oil was hit by figures from China showing annual rail freight volume – a key economic indicator – fell 11.9% last year, compared with a decline of 3.9% in 2014.
Daniel Ang, an analyst with Phillip Futures in Singapore, said oil fundamentals remained weak: “It is going to be very difficult to maintain higher prices.”
“Wherever you look – China, oil and the US, there is no clear evidence of improvement in economic fundamentals,” said Tatsushi Maeno, managing director at PineBridge Investments.
‘Series of slumps’
Commenting on the Shanghai slide, Kaiyuan Securities analyst Yang Hai said: “We’ve seen another stampede driven by panic.”
Rabobank’s Michael Every said: “It’s just another in a long series of slumps that we have seen in this market, and it’s not the last we will see either because the market is still overpriced. And too many people want to get their money out – it’s been a bubble since it began last summer.”
He expected Shanghai, China’s top mainland stock market, to fall a further 10% before stabilising.
The index has already fallen about 17% this year.
On the FTSE 100, among the risers were Randgold Resources and Fresnillo, with Shell and BHP Billiton among the biggest fallers.
Gold rallied to its highest level since November at $1,112.86 an ounce. The safe-haven commodity has risen nearly 5% this year, after sliding more than 10% in 2015.
The US Federal Reserve’s rate-setting committee starts a two-day policy meeting on Tuesday and is not expected to make any change.